Your family is growing. You’re primarily working from home and need more space. It is a seller’s market. Any of these reasons on their own are enough to start looking for a bigger place to call home.
Families that move from a smaller home into a larger home are called “move up homebuyers.” A move up buyer typically already owns a home and pays a mortgage but is ready to buy a new home with more square footage or an upgrade in amenities. The concept sounds simple, but it can be tricky.
Many homebuyers come to Brockdale because they are looking for a newer, larger home and want to be part of a community that focuses on luxury. Read through our tips for move up homebuyers and the do’s and don’ts we recommend to all of our clients when it comes to upgrading your home.
Mistake #1: Jumping the Gun on Purchasing a New Home
Don’t get yourself into a situation where you end up owning two homes at once.
Do communicate with your real estate agent and potential buyers about closing dates.
Buying a new home should be fun and exciting, but it is important to remember that move up buyers should take the process seriously. If paying one mortgage already seems stressful, paying two should sound downright terrifying.
Have an honest conversation with your real estate agent and mortgage loan officer about your financial situation and the current state of the housing market. If it is a seller’s market, your home might see several immediate offers and sell quickly. If it is a buyer’s market, you may have to tend to more price negotiations and the selling process could take longer.
If you accept an offer on your current home, be sure to allow yourself enough time for closing. However, it is rare to accept an offer without the buyer and seller knowing exactly how much time they have to move in or out.
Regardless of whether your home sells quickly or not, it is vital to have extra money saved for your new home. By avoiding the overlap of paying two mortgages, you will feel much more comfortable settling into your new abode!
We offer more tips for buying a house while selling a house if you need assistance in putting your first home on the market.
Mistake #2: Going All-in With Home Improvements
Don’t remodel your home with very specific design styles or costly upgrades.
Do make your home low-maintenance for the next homebuyer by replacing something major and necessary.
Improving your property value before selling is a key tip for move up homebuyers. You may have a bit of a fixer-upper on your hands if you’ve lived in your current home for many years. It’s normal — fixtures and decor go out of style, a new coat of paint is needed, or certain appliances could use replacing.
Even if your home is relatively updated and you haven’t lived there long, consider making some minor improvements to show buyers you’ve added value.
First thing’s first: improve your curb appeal. The first thing someone sees is the outside of your house! Make a good first impression with potential buyers by tending to the landscaping or sprucing up the painted exterior.
Whatever you do, don’t commit to making home improvements that will drain you of your finances and your time. Think about what really needs to be done in order to make your home more attractive and low maintenance to a buyer. If your home is old, invest in a new roof. If you know you haven’t updated the HVAC in several years, tackle that project so the buyer won’t have to.
Improving your property value can be as simple as replacing the floor in some rooms or changing out cabinet hardware to look more modern.
And while your home might be nicely decorated according to your taste, don’t assume the same of the buyer. Make your home as neutral as possible. Avoid bright colors on walls and eccentric furniture. The buyer will want to envision how their life can fit into your space.
Mistake #3: Not Understanding the Details of Your Current Mortgage Loan Pay-off
Don’t overestimate your current home value.
Do get a pre-approval for your new home.
Just because your home is located in a “hot” market, doesn’t automatically mean it will fly off the shelf once you list it. Again, it is best to discuss the appropriate listing price with your trusted real estate agent. Your agent will be able to tell you what other nearby homes sold for and why, while guiding you to your budget’s sweet spot.
If you overestimate your current home’s value, chances are it will sit on the market too long and potential buyers will be too intimidated to make any offers.
This is also where a pre-approval for your new home comes in handy. Your mortgage lender will be able to determine how much you can afford for a new home, interest rates, and more. Remember, there is more to home buying than the list price. You also have to consider closing costs, moving fees, insurance, etc.
Move up buyers can use their pre-approval as a guide to determine how much to sell their home for to feel financially secure. Your mortgage lender will also explain your remaining mortgage pay-off, or, the amount you are required to pay to satisfy the terms of your current loan and completely pay off your debt.
This is not just what’s left of your current balance. Your mortgage payoff amount also includes the payment of any remaining interest you owe through the last day of your loan term.
Do you feel confident in your decision to purchase a new home?
Moving up should mean upgrading in every way possible for you and your family. As a move up homebuyer, you should feel excited about your new home. At our Brockdale master-planned community, you can rest easy knowing our luxury homes have plenty of space surrounded by relaxed, lakeside living.
We wish you luck on your next home purchasing journey!